Buying an investment property & keeping their 'forever' home
With the economy bouncing back and business confidence on the up, Pete* an accountant, had just been offered a long-awaited promotion. The only problem was that he and his family would have to pull up stakes from their home in Napier to move closer to the company's corporate campus in Wellington.
Peter and his wife Nerida* (also an accountant) had already established an ideal life in Napier, which included living in their dream home, and they were reluctant to give it up. After much discussion, they decided to buy another property in Wellington and retain their Napier house, with the goal of returning there to retire when the time was right.
But this all came at a time when legislation changes limited the benefits available for residential property investors.
With the help of a mortgage adviser, Pete and Nerida were directed to Resimac's 80/80 Bundle Offer at 2.89%p.a.^ fixed for two years – an option that suited them given the significant equity they had in their Napier property already.
They used the existing equity in their property as the basis for the additional mortgage, meaning they didn't have to satisfy the 60% LVR needed for an investment loan. Additionally, they had good income that could be used to help subsidise repayments for the second property.
*Not their real names. The above scenario is for information purposes only and does not comprise professional advice or product recommendation. ^All advertised interest rates are available for new eligible loans and are subject to change. Your interest rate may differ depending on borrower category, security use and how much you borrow relative to the value of your property. Terms and conditions apply to all loan features. Final approval is subject to credit assessment. Valuation fee is at the cost of the valuation. Annual fee $0. Settlement fee $475. Discharge fee $495. Details about our products and our full interest rate disclosure for new and existing loans is set out in our Interest Rates Disclosure document. A schedule of our fees and charges is available on the Costs of Borrowing, Forms, and Terms page.